November 6, 2023
Why should you care about AVAF3’s Elliot Cocoplum?
We reviewed over 150 potential deals for the Ashcroft Value-Add Fund III (AVAF3) and chose Elliot Cocoplum as the final property for the fund.
Elliot Cocoplum is a 360-unit property in Broward County, an infill market between Boca Raton and Fort Lauderdale, with many value-add opportunities to take advantage of.
The property was built in 1986/87, making it an ideal location to modernize the amenities and renovate the units to a high-end scope.
Concrete block construction provides several benefits that directly impact NOI:
- Noise reduction maintains strong occupancy rates.
- Maintenance costs are reduced.
- Insurance costs are lower due to the durability and strength of construction.
- Can withstand some of the harshest conditions Mother Nature has to offer.
Reducing expenses like maintenance costs and insurance, while increasing occupancy rates, helps grow net operating income making a property more profitable.
This multifamily community provides the unique opportunity to invest in an asset with both townhome units and traditional apartment style units.
Did you say already renovated?
When the property was acquired, the previous owner had already renovated 60% of the units to a higher end scope. This included the addition of new granite countertops, backsplashes, stainless steel appliances, cabinet fronts, light fixtures, and plumbing upgrades.
These units are now achieving $200 in rent premium compared to the classic units.
The acquisition of the property was finalized in September. Since then, our in-house property management company has proceeded with the Value-Add Business Plan for the property.
The first thing to note is occupancy.
When Elliott Cocoplum was under the seller’s watch, the 60-day occupancy fell to 85%.
Since taking over the onsite team, the 60-day occupancy trend has risen back to 90%.
Warm weather still plays a role in this submarket. Seasonality in the Fort Lauderdale market shows that the leasing season tends to pick up in the fall and winter months. Meaning, this property is poised to recover quickly.
Our new property manager has worked in the Coconut Creek market for over 15 years and is confident that this property can get up to 95% occupancy and stay there.
Amenities that will keep residents coming back.
In other news, the renovation test units should be complete by next month, with one of those ultimately becoming the permanent model unit.
A pre-construction meeting has already been held regarding roof replacements, one of the first large projects we’re going to do on this property.
With a property of this size, it’s pretty common for a roof replacement to take about four months. In preparation, we have begun tree trimming throughout the property.
A second pre-construction meeting was also held to discuss further exterior improvements to be completed at the property, such as:
- Resurfacing the pool
- Installing LED lighting
- Building private fenced in yards
- Replacing the pond fountain, Painting the exterior
- Adding a dog park
These projects will begin after the roof replacements are completed.
Permanent signage is in the approval stage with the township and city. Once we receive that approval, we can then begin the scope of that work.
In the meantime, the township has been replacing the landscaping along the frontage to enhance the curb appeal on the property.
And last, the new designs for the amenity spaces are now complete and in the hands of the contractors providing bids. We expect to get these bids back in about two weeks. Work will begin sometime in November.
Here are some questions from savvy investors just like you:
What is the financing you placed on this property?
- Put fixed agency debt on the property.
- The loan amount is 65% of the purchase price.
- Fixing the interest rate mitigates the risk of further interest rate rises.
- Loan to value will decrease, helping to preserve capital.
- Not adding additional debt increases the value and therefore overall cash flow
Why was the current owner selling?
- Dome Equities was looking to close out their fund and needed to sell.
- Our relationship with the sellers gave us a leg up on the competition.
- They had a second property they wanted to sell, Halston Lakeside in AVAF3
- Pursuing a portfolio deal resulted in a lower overall purchase price for both properties.
If you would like to learn more about investing in our current fund, schedule a call with our Investor Relations Team.
